India's SAIL Seeks Agency to Undertake Energy Audit at Five Plants to Achieve Global Standards

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Researched by Industrial Info Resources (Sugar Land, Texas)--Steel Authority of India Limited (BSE:500113) (SAIL) (New Delhi) is seeking bids from agencies to undertake an energy audit and power consumption pattern for five of its integrated steel mills to make the company more energy efficient. The exercise is in preparation for the completion of the $15.8 billion expansion program in 2013 that will see SAIL's steel-making capacity increase from 14 million tons to 23 million tons at the five plants, and power consumption increase from 1,180 megawatts (MW) to 1,900 MW, and to 4,600 MW by 2020, when the company expects steel-making capacity to increase to 60 million tons.

SAIL officials said that A Sai Prathap, India's junior minister for steel, had set targets for the reduction of energy consumption. According to the minister, the Indian steel industry should reduce energy consumption 6.2 giga-calories per ton to the world average of 4.2 giga-calories per ton.

SAIL has stipulated that the extensive energy audit will have to be completed within three months from the date of the awarding of the contract to an agency and cover its steel plants in Bhilai in the state of Chattisgarh; Bokaro in Jharkhand; Durgapur and Burnpur in West Bengal; and Rourkela in Orissa.

The energy audit will be in several stages, comprising establishing power consumption patterns at each stage of operation as each of the plants; identification of wastage; shortfalls in equipment specifications and maintenance; comparisons with efficiency benchmarks; and shop-floor practices. Parameters established under these will thereafter be used as a platform to establish an energy efficiency and energy conservation benchmarked to best practices.

NTPC-SAIL Power Company, a 50:50 joint venture between SAIL and India's largest power producer, NTPC Limited (BSE: 532555) (New Delhi), with an installed capacity of 814 MW, is the primary captive power source for SAILs plants in Bhilai, Durgapur and Rourkela.

To reach benchmarks for global energy use, SAIL will create an Energy Management Department at each of its five plants. The group will perform cost analyses on a monthly basis and monitor deviations in energy performance indices, translating them in terms of costs and impact on profitability. Based on the audit report, each of the plants will undertake retrofitting of energy-efficient equipment within the existing technology, and necessary investments will be provided from the $15.8 billion earmarked for modernization and expansion.

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